FANDUEL and Skyscanner have long been lumped together in the public’s mind - and rightly so. Having each grown from a standing start around a decade ago, they achieved unicorn status within months of each other at the turn of 2016 before agreeing transformational deals within days of each other at the end of that year.
Yet while Skyscanner’s takeover by Chinese travel business C-trip proved a great success for its founders - and the many staff members who shared in the spoils - the fact that FanDuel’s merger with rival DraftKings ultimately fell apart has proved disastrous for those who backed the firm in its early days.
With a merger-termination clause handing control of the firm to its private equity backers, FanDuel’s founders, staff and early investors have all received nothing from a new deal, which, ironically enough, has massively endorsed the company they created.
Seed investors should know they risk losing everything when backing an unproven business.
But because FanDuel is widely thought to have been undervalued as part of its sale to Paddy Power Betfair the angel community has been left with a bad taste in its mouth.
If that affects its appetite for making further investments it would be bad news for the many firms desperate to become Scotland’s unicorn number three - and for an economy crying out for the jobs they could create.
But if FanDuel’s experience makes the many entrepreneurs hoping to grow their business consider the downside as well as the upside a major investor can bring, then maybe it won’t be such a bad thing after all.
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